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Economy, page 73

Federal resources against private enterprise

Accusation: Osec head Hösly is misusing his might in the market.

Zurich - The Osec general body meeting held on last Thursday was attended by like-minded persons only: nobody posed any questions, no one engaged in any discussions. State secretary, David Syz, as president of Osec's supervisory board, mainly praised Osec and encouraged it to carry on working along the same lines. After about barely an hour, the invitees could proceed to the buffet which had been laid out for them.

This sense of self-satisfaction has now raised the hackles of the critics. Notable amongst them are primarily companies which are also engaged in export promotion activities like the government-sponsored Osec; their complaint is that the Osec chief, Balz Hösly, is misusing his power in the market and distorting competition. Daniel Isler, managing partner of the Zurich-based company, Fargate AG, which supports Swiss enterprises in foreign countries opines: «In the interest of the Swiss national economy, Osec should do everything possible to offer an optimal network for exporting companies. Instead, it is competing against private companies.» 

This is exactly what the legislature wanted to prevent. When the parliament approved the new export promotion law in October 2000, it was clearly emphasized that Osec was only supposed to play a role which would be subsidiary to the private sector. In more concrete terms: To begin with, the services offered by private enterprises would have to be taken into consideration and only after that could Osec actively offer its services in the market.

It is on this condition that the erstwhile foreign trade organization Osec received a service contract and substantial funds from the federal treasury amounting to a hefty 15 million Francs last year. At the same time, Osec was converted into a private sector organization and now bears the name of Osec Business Network Switzerland.

However, the conditions of the legislature were not complied with in actual practice. Both Fargate, which has just been mentioned above as well as the Zurich-based export marketing enterprise, Exim-Index AG, to name another example, have been adversely affected by Osec according to their own statements. Yet between them, these companies can boast of long years of experience and a vast network of contacts in numerous countries.

Osec defends itself against these accusations by claiming that it is not lacking in intent. Press spokesperson, Stephan A. Meier states: «Various offers for co-operation on the part of Osec have not been taken up by the other party.» This statement is however refuted by the affected companies: If Osec happens to make any offers from which Osec itself would stand to gain the most and if they also happen to demand money for this in the bargain, then this can hardly be termed as co-operation. 

Osec's pricing policy is "clearly distorting competition»

Jakob Gisiger, VR-Präsident of Exim-Index AG sees this more as a problem of fundamental nature and calls for a clear demarcation between socio-economic and commercial consultancy at Osec. This had originally been conceived of with a view to avoid any conflict of interests. Gisiger: «Unfortunately everything remained just as it was. Thus, all the private companies which Osec had to work with, became its competitors at the same time».

For Isler of Fargate AG, the situation is further worsened by the fact that Osec is using government funds to launch an expensive PR-program in order to increase the awareness level of the contact points in those foreign countries where it offers consultancy services. According to him, this is «clearly distorting competition» just as in the case of its pricing policy. Isler: «Osec is competing with us at government-subsidized dumping prices».

Complaints are coming in from clients as well: To cite an example, a company called Trybol AG of Neuhausen had bought an address card index from Osec which subsequently proved to be more or less useless. Osec however maintained that they could not be held responsible for verifying all the addresses and dragged the case to the district court which then suggested a compromise. Even today, the company's managing director, Thomas Minder, expresses astonishment at Osec's attitude: The case is supposed to have been explained away by Hösly as being one concerning the management and finally led to expenses which were several times the cost of the card index, being incurred. Minder: «A private company would have gone all out to retain the client.» 

Balz Hösly in the meanwhile, is aggressively going about the task of building up his network. In the GBM on last Thursday, the head of Osec, who also sits in the Zurich Canton Council in his capacity as FDP politician, lauded the «impressive foundation work» by Osec, spoke about their «customized range of services», stressed on the "successful start" made by Osec in Romandy [French-speaking part of Switzerland] and introduced with «great pride» the new orientation in project management which is supposed to have been «extraordinarily successful». 

These statements can hardly be verified. According to Hösly, Osec does carry out a "customer satisfaction survey" amongst its clients once every three years. The results of these surveys are however not open to public scrutiny. This is astonishing. Other companies which enjoy financial support from the government such as the Post or the SBB have no reservations about allowing their survey results to be inspected.

Osec's annual accounts qualify Hösly's vain gloriousness: Turnover on customers' accounts constituted barely about 30 per cent last year. Instead of the ten Swiss business hubs which had been planned earlier only six could be opened abroad.

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